Beam Global 10-K

ITEM 1. BUSINESS. Overview Beam is a clean-technology innovation company headquartered in San Diego, California with factories in the U.S. in San Diego, California and Broadview, Illinois and in Europe in Belgrade and Kraljevo, Serbia. We develop, design, engineer, manufacture, and sell high-quality, renewably energized infrastructure products for electric vehicle (“EV”) charging, infrastructure for Smart Cities (a city that uses technology to improve the quality of life for its residents), energy security and disaster preparedness and highly energy-dense battery solutions in safe, compact and unique form-factors. Additionally, we manufacture steel structures with electronic integration such as street lighting, cell towers and energy infrastructure products as well as power electronics including invertors, charge controllers, power supplies and LED lighting. Beam’s energy storage products provide high energy density in safe, compact and bespoke form-factors, which we believe are ideal for the rapidly growing mobile and stationary equipment product market which often requires electrical energy without being connected to the electrical grid. Our EV charging infrastructure products are powered by locally generated renewable energy and enable vital and highly valuable services in locations where it is either too expensive, disruptive, or impossible to connect to a utility grid, or where the requirements for electrical power are so important that grid failures, like blackouts, are intolerable. We do not compete with EV charging companies; rather, we assist these companies by offering infrastructure solutions that replace the time-consuming and expensive process of construction and electrical work which are usually required to install traditional grid-tied EV chargers. We also do not compete with utility companies. Our products enable utilities and others to deliver reliable and low-cost electricity to EV chargers and, in the case of a grid failure, to first responders and others, through our integrated emergency power panels. Our charging products are rapidly deployed without the need for construction or electrical work. We compete with the highly fragmented and disintegrated ecosystem of general contractors, electrical contractors, consultants, engineers, permitting specialists and others, who are required to perform a traditional grid-tied EV charger installation construction and electrical project. Our clean-technology products are designed to replace a complicated, expensive, time-consuming and risk prone process with an easy, robust and reliable product at a low cost of total ownership. We provide energy storage technologies that make commodity battery cells that we believe are safer, longer lasting and more energy efficient. Our battery management systems (BMS), and associated packaging, make batteries safer and usable in a variety of mobility, energy-security, and stationary applications. Our street lighting and other street furniture products are mass produced and sold in 18 nations globally . We are increasingly adding power electronics, energy storage, computing, sensing and reporting to our street furniture products as we evolve them to provided greater levels of Smart Cities services. 2 Beam’s renewable energy infrastructure products and proprietary technology solutions target markets that are experiencing significant growth with annual global spending in billions of dollars. · EV charging infrastructure; · Smart Cities infrastructure; · energy storage solutions; · energy security and disaster preparedness; · transportation infrastructure products; and · Power electronics and telecommunications equipment The Company focuses on creating high-quality products that are powered primarily by renewable energy, rapidly deployable, have diverse use cases and are attractively designed. We believe that there is a clear need for rapidly deployable and highly scalable EV charging and infrastructure for Smart Cities, and that our EV ARC™, BeamSpot™ and other street furniture products fulfill that requirement. We are agnostic to the EV charging service equipment as we do not sell EV charging, rather we sell products which enable it. Our EV ARC™ and BeamSpot™ products replace the infrastructure required to support EV chargers, not the chargers themselves. We have over thirty years of experience deploying street-lighting, transportation, energy and telecommunications infrastructure products as a result of our 2023 acquisition of Amiga in Serbia. We have relationships with existing customers to whom we are now able to sell our renewably energized EV charging infrastructure products as well as our Smart Cities products. During the second-half of 2024 we significantly expanded our product portfolio with the addition of rapidly deployed and highly scalable charging infrastructure products for electric bicycles, electric scooters, and electric motorcycles. We also introduced de-salination as a capability to enhance the lifesaving aspects of our disaster preparedness products. Powered by 100% renewable energy, this self-sufficient water treatment system converts seawater into vital freshwater. It is equipped with four eMopeds for efficient and rapid transport in environments such as disaster or crisis zones, where people need it most. Our ability to make commodity battery cells safer, longer lived and more energy efficient in bespoke enclosures is, we believe, a significant differentiator as we move to an increasingly electrified and untethered world. All of our renewably energized products generate their own electricity and store it in integrated batteries. Our ability to create batteries which are energy dense and very safe in unique shapes and sizes, enables us to expand our reach through selling to customers which require specialized batteries such as drone manufacturers, robotic and medical devices, submersibles, refrigerated trucking units, and many other applications. We are also able to enhance our patented products which provide electric vehicle charging, energy security disaster preparedness through the creation of bespoke energy-dense and safe battery products which are unique to our in-house portfolio. We believe our chief differentiators are: · Our patented, renewably energized products dramatically reduce the cost, time and complexity of the installation and operation of EV charging infrastructure when compared to traditional, utility grid tied alternatives; · Our proprietary and patented energy storage solutions; · Our first-to-market advantage with EV charging infrastructure products which are renewably energized, rapidly deployed and require no construction or electrical work on site; 3 · Our products’ capability to operate during grid outages and to provide a source of EV charging and emergency power rather than becoming inoperable during times of emergency or other grid interruptions; · Our ability to add electrical capacity to provide for the significant increase demand brought by EVs, without having to go through expensive, time-consuming and risky utility grid expansion (adding power stations, transmission lines and distribution infrastructure like substations); · Our ability to create new and patentable products which are marketable and consist of a complex integration of our proprietary technology and parts with other commonly available engineered components, which create a further barrier to entry for our competition; · Our ability to create products which provide valuable solutions to nascent industries with very large market opportunities globally; · Our geographic footprint in North America and Europe, and existing customer base and contracts. Products and Technologies Electric vehicle charging infrastructure. Our clean energy infrastructure products currently incorporate the same underlying technology with a built-in renewable energy source in the form of attached solar panels and/or a light wind generator, along with battery storage, which enables our products to generate and store their own electricity while operating without connecting to the utility grid. Our products are also able to connect to the grid if a customer values that capability. We believe that the U.S. and global utility grids lack sufficient capacity to supply enough electricity to all EVs, data centers, electrified industry and other electrical devices which are becoming increasingly available to consumers and business, especially considering the number of national and state governments that have announced future bans on the sale of gasoline and diesel vehicles, as early as 2035 in Europe, with most bans being put in place no later than 2040. Even locations with a grid connection often lack circuits which have enough capacity to support EV charging in any meaningful way. For example, parking lots might have enough electrical capacity to power lighting but not enough to power EV charging. Beam products provide that power without a requirement to increase the electrical grid capacity at a site which can often be, and we believe will increasingly be, expensive, disruptive, complex and time consuming. We believe that there will be an increasing demand and need for rapidly deployed and highly scalable EV charging infrastructure products which do not require construction or electrical work, and which do not rely on the utility grid for a supply of electricity. We are not aware of any other products which provide a similar solution for this need as effectively as our patented products which are listed below: · EV ARC™ (Electric Vehicle Autonomous Renewable Charger) – Our most popular product- We believe this patented product is the world’s first and only transportable, solar powered EV charging infrastructure product on the market that fits in a parking space but does not reduce available parking. The EV ARC™ generates and stores all its own energy through its solar array so there are no utility bills to pay. EV ARC™ features our patented BeamTrak TM sun tracking technology that follows the sun to generate up to an additional 25% of solar electrical power. It does not need a grid connection which eliminates the need for lengthy construction projects, trenching, switch gear, or transformer upgrades. The EV ARC TM can be delivered to its intended location and is set up and charging in less than an hour. Because there is no foundation, trench or electrical infrastructure, the EV ARC™ typically does not require a building or any other kind of permit, and it is easily transportable if a different location is desired. EV ARC™ products support Level I, Level II and DC Fast Charging (requiring 4 interconnected units) and can charge between one and six EVs simultaneously. A single unit can provide EV charging to as many as 12 parking spaces. The electronics are elevated under the solar array which makes the unit flood-proof in up to nine and a half feet of water. EV ARC™ systems are independently rated to withstand winds up to 160mph. Because the EV ARC™ systems are solar powered, they are not disrupted during grid interruptions such as black-outs or brown-outs which is becoming increasingly important as more transportation relies on electricity for fuel. Current grid-tied EV chargers are often placed in locations where a suitable circuit is most easily accessed and cheapest to install, rather than in the most convenient and desirable locations for EV drivers. EV ARC™ systems do not need to be connected to the grid and as such, can be placed anywhere, making them a rapidly deployable and highly scalable solution for EV charging infrastructure. We received a patent in 2024 for a version of the EV ARC™ which, when fully developed, will be able to provide wireless charging to suitably equipped EVs. 4 Because EV ARC™ systems are highly visible, we believe that they are an ideal platform for sponsored deployments wherein networks of EV ARC™ systems are deployed and owned by us and monetized through sponsorship and naming-rights agreements with corporate sponsors who are eager to have their brands associated with renewable, clean-energy by sponsoring a city-wide sponsorship of free EV charging through what we refer to as our Drive on Sunshine™ network. We intend to deploy our Drive on Sunshine™ network in highly populated areas where we will deliver free EV charging while monetizing the network of EV ARC™ systems through corporate sponsorship programs. Our products also create significant reductions in greenhouse gas and CO2 emissions which, we believe, is a further inducement to encourage corporations to sponsor our network as they may benefit from the carbon offsets generated by a network of EV ARC™ systems. In 2024 we deployed our first sponsorship funded network of EV ARC™ systems at Belgrade International Airport in Serbia. Beam Global retains title to the EV ARC™ and receives recurring payments from Globos Osiguranje, Serbia’s only domestic private insurance company. Globos Osiguranje benefits from the promotion of their business as a result of their branding being prominently displayed on the EV ARC™ systems which are deployed in parking spaces in parking lots nearest to the airport terminal buildings. The Globos Osiguranje branded EV ARC™ systems are placed in locations that are visible as you arrive and depart from the airport. We also entered into an agreement with Vinci Airports, the world’s leading private airport operator with over 70 airports under management internationally, which does not require us to pay rent because of the amenity value that is delivered to the airport through the provision of a free driving on sunshine experience for their visitors and guests. We believe that we may be able to repeat this model in other Vinci airports around the world. We also believe that now that we have successfully proved that this business model works, we can further expand it into different types of environments where there are sufficient densities of people to make the advertising worthwhile. · SolarTree® Products – These patented products are used for larger scale solar powered EV charging applications. We believe our Solar Tree® product to be the only single column, sun tracking, solar support structure with integrated energy storage, EV charging and media platforms available today. The design of our Solar Tree® systems is ideal for charging electric buses, electric heavy-duty vehicles, electric agricultural equipment, public transportation, and electric vehicles used in the construction industry. In 2020, we launched our new generation of Solar Tree® DCFC products with on-board battery storage that do not require a utility grid connection (though grid connection capability is available). As a result, these products can be rapidly deployed and enable EV charging in remote locations where it would otherwise be impossible or economically infeasible, such as rest areas, park and ride locations, construction sites, or any location with insufficient grid connectivity. The costs and environmental impact associated with delivering a 50kW or greater circuit to a remote rest area may be prohibitive, whereas a Solar Tree® DCFC can be deployed with minimal site disturbance. We believe our Solar Tree® products with on-board battery storage can provide a highly reliable source of energy to provide emergency power to first responders during times of emergency or other grid failures. We also believe that our Solar Tree® products which may be optimized for branding can create a visually appealing platform for the delivery of a sponsor’s brand with a less onerous planning and entitlement process than that experienced with traditional signage. · EV ARC™ DCFC – DC Fast Charging system for charging EVs comprised of four interconnected EV ARC™ systems and a 24kW DC fast charger. · BeamSpot™ – patent issued on December 31, 2019, and currently.in the process of initial installation. A streetlight, EV charging and emergency power product which uses an existing streetlight’s foundation and a combination of solar, wind, grid connection and onboard energy storage to provide curbside charging and emergency power without the need to do extensive construction or electrical work. · BeamBike™ - rapidly deployed, construction free, solar-powered charging system based on the patented EV ARC™ platform which generates and stores its own clean electricity, accessed through twelve integrated, weatherized 120 V outlets supporting any eBike charger. Supports 12 eBikes and is available with or without bundled eBike packages. · BeamPatrol™ - Rapidly deployed and easily transported, the BeamPatrol™ station allows law enforcement and safety personnel to charge and quickly access electric motorcycles without the need for any additional infrastructure or fuel. This innovative solution is ideal for law enforcement, customs and border patrol, the military, park services, air and seaport operations and any situation where the ability to rapidly gain access to an environment, without alerting targets of the operation, is required. BeamPatrol™ and the motorcycles generally have low maintenance and fuel costs and provide a highly reliable mobility solution while assisting in the carbon reduction efforts of the agencies that use the product. Available with, or without bundled Zero eMotorcyles. 5 · BeamWell™ - based on the patented EV ARC™ system, is a self-sufficient, self-contained operational system for use in war zones and remote or disaster areas where only salt, brackish or dirty water is available because a reliable clean water supply is not available or has been interrupted. The BeamWell™ system provides three essential services to regions in crisis: it turns seawater into fresh water, which is then stored in an integrated 3000-liter tank that is replenished daily; it provides a source of electricity which can be used for medical or communications devices as well as cooking, refrigeration and lighting; and it charges four integrated and bundled Benzina Zero electric mopeds for the rapid distribution of food, water, medications or other vital resources, to those in need. · Smart Cities Infrastructure products – Street lighting, street furniture, communications infrastructure products, energy infrastructure products, with electronics integration including renewable energy sources, battery storage, sensors and IoT integration. · UAV ARC™ - patent issued on November 24, 2020, and currently under development. An off-grid, renewably energized and rapidly deployed product and network used to charge aerial drone (UAV) fleets. · Power electronics and energy storage solutions for telecommunications, energy infrastructure and, in the future, our own patented product portfolio. Energy Storage Solutions According to MarketsandMarkets Analysis, the global lithium-ion battery market size is projected to grow from $130 billion in 2024 to $350 billion by 2033; and it is expected to grow at a compound annual growth rate (CAGR) of 12% from 2024 to 2033. We are living in an increasingly electrified world and more of the devices we rely on are no longer connected to a wall socket or any kind of utility connection. This untethering requires energy storage to be more energy dense and packaged in increasingly smaller and lighter formats. Physics dictates that the storage and release of electrical energy will create heat. In extreme cases this can lead to a chain reaction within a group of battery cells that can be difficult to stop, known as “thermal runaway”, which has led to some well publicized fires. Our energy storage products create high performance energy storage solutions used in EV charging, electric vehicles, micro mobility, aviation, medical devices, robotics, stationary storage, and maritime applications. We believe that we are unique in the EV charging industry in that we use our own proprietary energy storage solutions in our EV ARC™, BeamSpot™ and other EV charging products. Our proprietary and patented passive thermal management, modular platform architecture, and scalable battery management systems (BMS), enhance safety and performance to prevent thermal events, while extending battery life and reducing lifetime stored energy costs. We provide safe, scalable and high-powered energy storage solutions which have enabled electrified applications in many formats for Fortune 100 companies in the U.S and Internationally. Energy Security and Disaster Preparedness Power outages cost the United States up to $150 billion per year according to the United States Department of Energy. Our products are fully sustainable and include battery energy storage that can be used during times of grid or hydrocarbon fueled generator failure or during public safety power shutoff (PSPS) as may be required in certain jurisdictions. Our primary focus in energy security is to ensure access to EV recharging infrastructure during grid failures, such as blackouts. As the adoption of EVs increases, it will be critical to have fuel (recharging) infrastructure that is not reliant on the utility grid with its centralized vulnerabilities. We have witnessed power outages in Texas due to cold weather, in California due to wildfires and in California and New York due to hot weather and in other parts of the nation whenever inclement conditions such as high winds or flooding occur. California has also been susceptible to public safety power shutoffs (PSPS) to prevent fires during high wind events. There have been kinetic and cyber-attacks on the grid and the U.S. government has evidence of intrusions by nefarious nation state actors. A Wall Street Journal article reported that attacks on the US power grid rose 71% in 2022 over 2021. In April 2024, North American Electric Reliability Corporation (NERC), a division of the grid oversight body, reported that physical assaults on the grid have remained high since rising in 2022, with about 2,800 reports of gunfire, vandalism and other strikes on electrical networks in 2023. Some 3% of those attacks led to outages or other operational problems. Events such as these constitute significant vulnerabilities which are expensive, disruptive, inconvenient, and dangerous. As we electrify our transportation fleets, these events may become catastrophic. The U.S. has a Strategic Petroleum Reserve to ensure that it never runs out of gasoline and diesel, but there is no strategic electric reserve. The electrical grid faces unprecedented challenges as a result of increased frequency and intensity of extreme weather events, such as heat waves, wildfires, hurricanes, floods and other climate events which can disrupt the generation, transmission and distribution of electricity. 6 Beam’s products are a highly robust and secure source of power for EVs and provide a hedge against grid failures. Our EV ARC™ and BeamSpot™ currently provide locally generated and stored electricity. We are engaged with government officials at every level to increase awareness of our products and the benefits they can bring to energy security. We are increasingly hearing suggestions that 25% of all EV charging infrastructure should be independent of the centralized grid. We believe that our products are uniquely positioned to fulfill this need. We believe that our current contracts with California, Florida, New York City, and the Federal government through our General Services Administration (GSA) Multiple Award Schedule Contract ideally position us to take advantage of what we believe will be a significant increase for the requirements of robust and sustainable EV charging infrastructure. We believe our products are valuable and politically popular regardless of which administration is currently in power because they provide: 1. American made products 2. Reliable Clean Energy 3. Energy Security 4. American fueled transportation 5. Communications and energy infrastructure We believe that our products are ideally suited to fulfill all these requirements. Traffic Telecommunications and Energy Infrastructure Products On October 20, 2023, Beam acquired Amiga DOO Kraljevo (“Amiga”), a business located in Serbia that manufactures and distribute steel structures with electronic integration, which products listed below we sell throughout the European region: (i) infrastructure products for public lighting; (ii) infrastructure products for mobile telephone, networks, and transmission lines. (iii) infrastructure products for tram, trolleybus, and railways. (iv) infrastructure products for contact networks, masts, portals and semi-portals for road and railway signaling; (v) large steel lattice structures for specific purposes (e.g., stadiums, factories, power plants, etc.); and (vi) distribution and command electrical cabinets. Our European operation has strong engineering, product development and manufacturing capabilities which is well suited to manufacture Beam’s current products, and assists in the development and manufacture of Beam’s new products, such as the BeamSpot™. We intend to introduce our portfolio of patented renewably energized products further in Europe the Middle East and Africa. Since Amiga's customer profile is similar to the customers with whom we have had success in selling our renewably energized products in the United States and we have observed that the sales cycles for these customers is generally faster. On August 30, 2024, Beam acquired Telcom d.o.o. Beograd (“Telcom”), a business located in Serbia and engaged in the manufacturing of power electronics and telecommunications equipment. Telcom engineers and manufacturers specialized power electronics includer invertors, charge controllers, power supplies and LED lighting. Telcom has electrical engineering, product development and manufacturing capabilities which are ideally suited to improve the Company’s current and future products for the global market. Telcom has a well-respected and highly talented team of electrical engineers, focused on power electronics and the integration of renewables and energy storage. We intend to continue to grow Telcom’s legacy business, and we believe that. Telcom’s portfolio of existing customers also offer further opportunities for expansion of our products in Europe. Outdoor Media Advertising The Company believes there is opportunity in the outdoor advertising space to place outdoor advertising content on Beam’s infrastructure products. The objective is to sell advertising space on our products to a company, with the proceeds being used to fund the delivery of EV ARC™ systems. While we believe this is a proven, successful business model, and our EV ARC TM provides a good platform for advertising for a company who seeks to promote their support of clean energy. In November 2024, the Company announced its first sponsorship agreement with Globos Osiguranje, one of Serbia’s premier insurance companies. Under the agreement, Globos Osiguranje sponsored five EV ARC™ solar-powered EV charging stations that are now deployed at Belgrade Nikola Tesla Airport, Serbia’s busiest international travel hub, and will provide free public electric vehicle (EV) charging. In order to facilitate this sponsored “Driving on Sunshine” initiative, Beam Global previously secured an agreement with Belgrade Airport, part of VINCI Airports, an operator of over 70 airports in 14 nations across the globe, to operate the network in prime locations at Belgrade Nikola Tesla Airport with further cooperation with VINCI Airports to be considered. 7 This milestone three-way partnership marks Beam Global’s entry into an owner-operator business model, generating income through a long-term annuity stream with recurring payments. By retaining ownership of the EV ARC™ systems, Beam Global secures a steady, predictable revenue stream while delivering sustainable solutions. Globos Osiguranje is uniquely able to provide “Driving on Sunshine” sponsored EV charging for free to EV owners because EV ARC™ systems do not require utility electricity and do not generate costs for the energy dispensed. Providing the EV charging for free while monetizing the sponsorship significantly lowers administrative costs and risks. We believe that the amenity value delivered to site hosts enables Beam Global to receive highly favorable economic terms on the parking spaces in which the EV ARC™ systems are placed. This unique model means that sponsorship payments are not diluted by typical operating costs, which might burden companies that do not have Beam Global’s technology advantage. Strategy Target Markets Beam’s target markets consist of several broad segments: state, municipal and federal governments and agencies, corporations, universities, retail, hospitality, and international markets. These segments can further be broken down into increasingly granular segments as different market opportunities are identified. Beam’s largest customers include the U.S. Federal Government, including the U.S. Army, Department of Veterans Affairs, Department of Homeland Security, United States Marine Corps, and many other federal agencies, the State of California, which is a conglomeration of California state agencies and municipalities. We have expanded the sale of EV ARC™ systems to 41 states throughout the U.S., three international countries, Puerto Rico and the U.S. Virgin Islands in the Caribbean. The largest customers that we sold in 2024 were the US Army, Department of Homeland Security, followed by the State of California. In October 2023, Beam acquired Amiga DOO Kraljevo (“Amiga”) which is a business located in Serbia and engaged in the manufacture and distribution of steel structures with electronic integration, such as streetlights, cell towers, and ski lift towers. Amiga’s manufacturing capabilities are well suited to manufacture and sell Beam’s current products into the European market , which is a larger market than the U.S. Amiga has also a strong engineering team that can help to develop our new products for sale in both the U.S. and Europe. We believe this provides a strong growth opportunity for Beam’s products. Amiga’s target customers have typically been of municipalities and other government entities. Amiga's target market has typically been very similar to the target market that we have pursued in the United States and as a result we are now able to expand our selling efforts into much larger markets with what we believe are significantly improved opportunities. On August 30, 2024, Beam acquired Telcom d.o.o. Beograd (“Telcom”), a business located in Serbia and engaged in the manufacturing of power electronics and telecommunications equipment specializing in power electronics includer invertors, charge controllers, power supplies and LED lighting. Telcom has a well-respected and highly talented team of electrical engineers, focused on power electronics and the integration of renewables and energy storage. Telcom’s target customers have typically been focused on telecommunications infrastructure providers as well as providers of material rehandling equipment and other consumers of power electronics particularly where inversion and energy storage are concerned. Our energy security products with integrated battery storage renewable energy generation on power electronics deliver a further set of product opportunities for sales to Telcom’s existing customer base and to others with similar profiles. Therefore, we believe that the acquisition of Telcom creates opportunities for beam to broaden our target markets while at the same time improving our existing portfolio of products. The factors below have been considered in determining favorable markets for our products: · Economic Factors . Our ability to deploy infrastructure with a fixed cost in environments with difficult, time consuming permitting and regulatory requirements and high construction and electrical costs. · Speed to deploy. As EV adoption increases and the stresses on existing utility grid infrastructure increase the requirement for EV charge and energy security infrastructure becomes more acute and more urgent. We are able to provide EV charging and energy security to locations in many cases in less time than it would take to pull permits for grid-tied solutions. · Scalability. Because we are not constrained by local construction, electrical and permitting requirements we are able to scale up EV charging and other energy infrastructure deployments in a manner which is not feasible with traditional approaches because of construction, design and engineering challenges inherent in in-the-ground solutions. 8 · Sociocultural Factors . High concentration of EV drivers and a cultural desire to be good stewards of the environment. · Technological Factors . We believe our products are ideal for regions with good insolation, expensive energy costs, poor or degraded air quality, and a lack of capacity or expensive upgrade requirements for their utility grid. · Consumer Products. Auto manufacturers are delivering more diverse and popular EV models such as Ford’s F150 Lightning, GM’s electric Hummer, Rivian’s RT1, Ford’s E Mustang and Kia’s EV6. · Political Factors . Political statements, mandates and laws supporting policy to reduce carbon emissions through the electrification of transportation. State and local governments focusing on the transportation industry and the electrification of fleet vehicles to reduce carbon emissions. Many of these factors have been important since the early days of EV adoption. Government tail winds are stronger than ever even in light of the recent administration change in Washington, with many nations and states announcing the outright ban on gasoline and diesel vehicle sales during the next two decades. In the U.S., while the federal government has become less enthusiastic about the acquisition of electric vehicles and electric vehicle charging infrastructure, there are still currently nine states that have announced plans to prohibit the sale of new internal combustion engine automobiles after 2035. California has announced a similar ban and seventeen other states have historically followed California’s regulations. In addition to all-electric car manufacturers such as Tesla, BYD, Lucid Motors, Rivian, Polestar, etc., most car companies now offer electric vehicle options for various types of vehicles. General Motors has committed to only offer zero-emissions vehicles by 2035 and six major automakers including Ford, Mercedes-Benz, Volvo and 3 others, along with 30 nations, signed a pledge to eliminate sales of new gas and diesel-powered cars no later than 2040 in leading markets. Automotive manufacturers have started production of electric vehicles which are more consistent with traditional car models that have been popular with U.S. consumers. GM has launched an electric Hummer which has 1000HP (compared to the gasoline version with 300HP) with a similar acceleration rate as the F150. The European Union has also announced a ban of the sale of internal combustion engine vehicles in 2035. Europe is the largest automotive market in the world with 405 million cars versus 320 million in China and 290 million in the United states. We believe that consumers will adopt EVs faster than many experts are predicting and that as a result, the requirement for growth in EV charging infrastructure will be more urgent than is currently forecasted or contemplated. We also believe that as the easiest (low hanging fruit) locations for grid-tied chargers are established, the process of deploying traditionally installed and powered grid-tied EV chargers will become more expensive and time consuming. At the same time, we believe that we will continue to reduce the costs of producing our products and become faster at deploying them. During a period of significant and increasing demand, we believe that our scalability and rapid deployment will create a significant advantage for our products and our position in the market. Growth Strategy Our growth strategy can be broken into the following sectors: 1. Geographic expansion 2. Product and technology portfolio expansion 3. Customer segment diversification 4. Targeted selective acquisitions Geographic Expansion Since the fourth quarter of 2023, we have been selling our products in the European market. We have undertaken a process of training salespeople in that region and equipping them with sales collateral so that they are able to adequately describe our product solutions and to educate our customers on the v Geographic expansion. That process has already borne fruit, most notably with our sales of EV ARCs™ to the British Army in Cyprus And the deployment of a sponsored network of EV ARCs™ at the Belgrade International Airport. Our Spanish partners GECI have sold EV ARCs™ in Spain And our Romanian partners have recently closed a sale in Romania. We now have sales representatives in many countries in Europe and the Balkans as well as in the Middle East and in Africa period. We believe that this level of geographic expansion will create many opportunities for us to expand our sales and revenues in the coming quarters. Historically our revenues and growth have all come from the US market. We're now selling into the US, North and South America, Europe, the Middle East and Africa. The needs in each of these markets are similar and our products capability of addressing those needs is, we believe, universal. 9 Product and technology portfolio expansion Historically the majority of our revenues have been generated through the sale of a single product - the EV ARC. In the fourth quarter of 2024 beam global introduced several new products targeting energy security and the electrification of transportation. 1. BeamBike™ 2. BeamPatrol™ 3. BeamSpot™ 4. BeamWell™ 5. BeamSkoot™ BeamBike™ is a rapidly deployed charging infrastructure product for electric bicycles. There's no construction or electrical work and because it generates and stores its own electricity it does not require a connection to the utility grid and it does not generate a utility bill. It is capable of charging 12 electric bicycles at the same time and we will sell it either without Electric bicycles so that existing owners and users can charge their e bikes outdoors, or as a bundle with the bicycles included through a partnership with our partner Benzina Zero. BeamPatrol™ is a rapidly deployed charging infrastructure product for electric motorcycles. There's no construction or electrical work because it generates and stores its own electricity and does not require a connection to the utility grid and does not generate a utility bill. It is capable of charging 4 electric motorcycles at the same time and we will sell it either with out electric motorcycles so that existing owners and users can charge their electric motorcycles while they are out and about or we will sell it bundled with four electric motorcycles from zero motorcycles our partner. This product has been developed particularly to target the law enforcement community who are increasingly using electric motorcycles in place of gasoline models. Currently police departments in the US Europe and Asia are using these motorcycles and we believe that creating a bundle where the customer receives the motorcycles the charging infrastructure and all the fuel that the motorcycles will ever consume creates a significant opportunity for increased sales and revenues. BeamSpot™ is a street light replacement product. It generates and stores its own electricity using a light wind generator and a tracking solar array period. The streetlight’s pole is full of our proprietary battery technology. This product has been designed to provide street lighting that does not fail during a blackout and also curbside electric vehicle charging without the need for extensive construction or electrical improvements. It is an ideal product for municipalities, airports, shopping malls, stadiums or any environment where there are large parking lots or the requirement to provide electric vehicle charging at the curb. BeamWell™ is a rapidly deployed product which requires no construction or electrical work. It provides electricity for cooking refrigeration or other essential services. It is also equipped with a desalinization plant which enables it to convert salt water into clean drinking water. The product is further equipped with four highly ruggedized electric scooters which enable the operators of the product to deliver food, medical supplies or clean drinking water to constituents in environments where those resources are not readily available and because of wars or national disasters, it is not easy to drive larger 4 wheel vehicles to the locations where the people are in need. We have designed this product initially for deployment in Gaza where we expect non-government organizations to use it in the execution of their mission. We also believe that this will be an excellent product for post natural disaster recovery efforts. For example, hurricanes often knock out electrical supplies and spoil freshwater supplies due to saltwater storm surge. BeamWell™ Can be deployed in less than an hour after delivery and provide essential services to people in need either in war zones or in regions where natural disasters have struck. BeamSkoot™ is a rapidly deployed charging infrastructure product for electric mopeds. There's no construction or electrical work and because it generates and stores its own electricity it does not require a connection to the utility grid and it does not generate a utility bill. It is capable of charging 4 electric mopeds at the same time, and we will sell it either without electric mopeds so that existing owners and users can charge outdoors, or as a bundle with the mopeds included through a partnership with our partner Benzina Zero. As a result of our acquisition of Amiga in 2023, we are one of the largest manufacturers of streetlights in Europe. We have an extensive portfolio of bespoke and mass-produced street lighting solutions which we are selling in countries across the region. We also manufacture other steel structures with integrated electronics such as renewable energy production, telecommunications infrastructure and traffic portals. 10 We are increasingly enhancing our portfolio of products through the addition of software, power electronics and sensors period. A significant part of our growth strategy is based upon our belief that our customers will increasingly value data delivered to them from our extensive portfolio of products which we are continuing to make further developments in this area. We intend to make further developments in this area and we'll use a combination of in-house development solutions, so solutions acquired from others and potentially acquisitions. We believe that combining machine learning with AI in the type of sensor rich environments which we can deploy will create significant revenue opportunities. Customer Segment Expansion Historically a large proportion of our revenues have been derived through the sale of products to US governmental agencies. However, in 2024 we continued to increase the number of sales from corporate customers. Over 30% of our sales in 2024 were nongovernment sales. As part of our growth strategy for the last several quarters, we intend to continue to expand our focus on sales to nongovernment customers. We believe that our products provide a great deal of value to corporate customers who are increasingly concerned with energy security, carbon contribution reductions and technology solutions which do not require significant construction or electrical projects. At the same time, we will continue to focus significant selling resources on governmental agencies outside of the United States. In Europe, governments are still very actively pursuing the electrification of transportation and carbon reduction through the generation of electricity using renewable sources. In the Middle East there are large amounts of petrol dollars being spent on renewable energy technology and the electrification of transportation. We believe that Africa offers very significant opportunities as that continents 1.4 billion people increasingly adopt vehicles which are not powered by internal combustion engines. We believe that all these new customer segments will create opportunities for significant growth in 2025 and the years beyond. Targeted Selective Acquisitions Our strategic geographic and product portfolio expansion has been significantly enhanced by the acquisitions that we have already made. We have gained new technologies, new customers and new market opportunities while at the same time adding capabilities which have reduced our costs and enhanced our gross margins. Our acquisition of a battery manufacturing company in 2022 increased our patent portfolio, gave us access to new industries and opportunities, defended our supply chain, and has had a significant impact on reducing our cost of goods sold while improving our product. Our acquisition of a 250,000 square foot factory facility on 6 acres of land in Kraljevo, Serbia opened up new markets in Europe, the Middle East and Africa. It also enabled us to develop our BeamSpot™ product, reduce our cost of manufacturing both in Europe and the United states. It also enhanced our engineering and product development team in an extremely economically beneficial manner. Our acquisition of a power electronics company also based in Serbia means that we can now start to create bespoke electronics solutions for our products which will enable us to reduce our costs while improving our production periods. This acquisition also allowed us access to new customer segments. We take a highly disciplined and careful approach, where acquisitions are concerned, ensuring that we buy companies which are not only a good strategic fit for us but that also come with competent and engaged management teams at a price, and with a deal structure, which is not only good for everybody involved, but with particular emphasis on benefiting Beam Global shareholders. We continue to be acquisitive, and we are actively searching for opportunities which we believe will continue to improve our business model, our business operations, our revenues and profitability. We believe that there are areas of opportunity in further sourcing our manufacturing operations through the acquisition of companies who make components that are necessary to the operation of our products. We also believe that there are opportunities for us to acquire companies which may bring new technological progress to our organization in order to increase the barrier to entry for our competition and our ability to generate further revenues at higher gross profits. We will continue to seek targets and to endeavor to negotiate beneficial deals for Beam Global while at all times retaining our discipline and our commitment to making acquisitions that are well priced, well-structured and in the best interests of Beam Global shareholders 11 The electric vehicle market is expected to grow at a rapid pace, and it is expected that the EV infrastructure market will grow at a comparable pace to support the EVs. According to Market.us, research indicates that the EV infrastructure market is expected to reach $224.8 Billion by 2032 which is a 27.5% compound annual growth rate (CAGR) between 2024 – 2032. In December 2024, the California Energy Commission approved a plan for nearly $1.4 billion in funding for 17,000 new light-duty chargers statewide. We currently operate in three rapidly growing markets: EV charging infrastructure, energy storage (batteries), and energy security and disaster preparedness. We believe that our products have a global appeal and that we are at a very early stage in t he development of our sector. We believe that our strategic growth plan will enable us to increase our user base and revenues while increasing profitability. Our strategic growth plan includes: · Engaging government relations experts to educate decision makers on the value of our “Made in America” products. · Increase marketing efforts to educate potential customers. · Expanding our geographic footprint and customer base, especially in Europe, the world’s largest automative market. · Increasing our gross margins by increasing production volumes, improving operating efficiencies and reducing the cost of materials and production. · Increase leverage of outsourcing as our manufacturing process scales. · Expand our recurring revenue business. · Educate potential customers regarding federal and other government grants, investment tax credits, and other incentives available to our customers. · Capture market share of the electrified personal and public transportation space, which is at a nascent phase. · Continue to develop and innovate new products and build a strong IP portfolio. Sales and Marketing Beam utilizes a combination of an in-house sales team and outside consultants, pairing customers with our sales specialists, or Clean Mobility Experts, to ensure their needs are met. Historically, almost all of our sales have been made by a relatively small in-house sales team based largely within the United States. In 2024, we started to execute on a new strategy of engaging outside sales resources such as distributors, resellers and agents. We view this salesforce strategy as an important part of our plan to increase sales while maintaining our operating costs at a low and stable level. The agreements we have put in place with distributors, resellers and agents are all performance based and as such we have no increase in our operational costs. We believe we are increasingly able to be successful with an outside sales strategy due to the maturing of our internal sales processes and materials and collateral. We are currently in the process of designing a thorough selling process flow instruction manual. we're also developing a Sales Resource Center which will be hosted online and available to anyone we authorize. We now have resellers and agents in the United States, Spain, Portugal, Italy, Caribbean, Central America, the Balkans, the Middle East, Africa and Australia. Certain of our selling collateral has already been translated into multiple languages and we are creating video and other content which will be used as selling aids by our own internal sales teams as well as the external resources we are engaging period. The external resources which we have recruited all have proven histories and good experience in selling infrastructure products to the types of customers with whom we have had success historically. Our European operations legacy business has for many years been supported by outsourced selling resources and we've been able to learn a great deal from their experiences while at the same time putting those same selling resources to work distributing the new products which we were introducing to the region. While it is early days for this relatively new strategy on our part, we are already starting to see the benefits from it and we believe that this will create significant opportunities for us to increase our revenues and profitability in new markets and the markets we're already addressing. 12 Our U.S. sales process is heavily focused on driving awareness of Beam Global solutions for charging needs. We have been investing more in marketing and videos. Beam uses research to identify potential customers, as well as contacts established through trade show events and in-bound calls. We also utilize a combination of regional and industry focused campaigns, nurturing campaigns, speaking opportunities, product demonstrations, press releases and social media (Facebook, Instagram, Twitter, and LinkedIn). Beam is, we believe, an industry leader in the sustainable EV charging infrastructure space, and we use our website and social media to highlight our innovative products and offerings. Sales of our products can often have long sales cycles due to the capital expense, budgeting cycles, and the sophisticated nature of our products. We are working to decrease these sales cycles and believe with an increased focus beyond government agencies this will improve as we increase awareness and gain acceptance of our products as well as an increase in the urgency surrounding the deployment of EV charging infrastructure. Sales often rely on bureaucratic processes and funding approval which can result in extended sales cycles. We support our customers by identifying grants and the federal programs to reduce the cost of their purchase. Our products may be eligible for various taxes and other incentives, which can significantly reduce the out-of-pocket expenses paid by our customers. Examples of these incentives include: · Federal Solar Investment Tax Credit (ITC) (Section 48 of the tax code). This may provide a tax credit, which is currently at 30% of the amount of a solar energy system purchase. · Rule 179 Depreciation or Bonus Depreciation - allows our customers to accelerate first-year bonus depreciation of their solar energy system up to 60% of the cost of the system for property placed in service during 2024, and 40% for 2025. · The Inflation Reduction Act of 2022 extended and amended the 30C Alternative Fuel Vehicle Refueling Property Credit (30C credit) which provides an income tax credit for qualified alternative fuel vehicle refueling property, including certain property for the recharging of an electric vehicle. This program is available through January 1, 2033, and provides an income tax credit for businesses up to $100,000 per deployment, which helps to make EV chargers more accessible for commercial use. We believe that because our products are rapidly deployed, enhance energy security and are made in America, we are well positioned to benefit from these and other initiatives. Major Customer Contracts In 2024 and 2023, we had two major customer contracts, the State of California and the General Services Administration (GSA) Multiple Award Schedule (MAS) that accounted for 58% and 77% of revenues for the years ended December 31, 2024 and 2023, respectively. Each of these contract vehicles represents a highly diverse and dispersed customer prospect pool for Beam Global due to the extensive and varied nature of government departments within the Federal and California government spheres. Contract with the California Department of General Services . Our contract with the California Department of General Services (the “California Contract”) permits California state and local government agencies, including cities, counties, special districts, California State universities, University of California systems, K-12 school districts, and community colleges, to purchase EV ARCs™, ARC Mobility™ Trailers, and our EV ARC™ DC Fast Charging Electric Vehicle Autonomous Renewable Charger and related accessories from us. The California Contract can also be used by state, local and municipal government entities throughout the U.S. Since 2018, we have sold 408 EV ARCs™ under the California Contract, for a total of $30.8 million through December 31, 2024, which includes 50 units totaling $3.9 million sold in 2023 and 124 units totaling $10.4 million sold in 2024. The term of the California Contract expires in June 2025, but the term may be extended upon mutual agreement for two additional one-year periods. GSA MAS and GSA BPA Contracts . Effective November 2020, following an extensive evaluation process, Beam was awarded a five-year General Services Administration Multiple Award Schedule contract, which facilitates the purchase of various products by government agencies and other agencies seeking EV charging and disaster preparedness equipment. In addition, we were awarded a five-year GSA Blanket Purchase Agreement effective April 26, 2022, which allows federal agencies to purchase EV service equipment and related products. Both contracts help to simplify the federal procurement process and ensure the best pricing for the agency. We sold 717 EV ARCs™ through these contracts for $55.6 million in prior years and 189 EV ARCs TM for $16.5 million in 2024. We received several large contracts from the US Army, Department of Homeland Security, Department of Veteran Affairs, US Marine Corps and more through these cancellable contracts. 13 Competitors EV Charging Infrastructure We do not compete with EV charging companies or utilities. In fact, we support the major EV charging product and service providers by factory integrating their products onto ours, prior to deployment. We have deployed ChargePoint, Blink, Enel, Electrify America and many other quality charging brands. We also do not compete with utilities who use our product as another tool to provide electricity, primarily for EV charging to their customers. We currently have seven utility customers and anticipate that that number will grow as more utilities become engaged in EV charging and in deploying distributed generation resources to enhance grid stability. Our product is unique in that we are a complete solution for EV charging infrastructure requirements. Our product provides both a renewable energy source, and EV charging capability in a rapidly deployable and highly scalable construction-free format. We do compete with several companies which are involved in the design, construction and installation of fixed grid-connected EV charging stations that depend on the utility grid for a source of power, and on the construction and civil and electrical engineering services for the installation of traditional infrastructure. Competition in the solar renewable energy and EV charging industries is intense, and competition is fragmented among a wide variety of entities. Companies such as Schneider, Eaton, Enel X, and Bosch manufacture EV charging units but do not offer charging services. Companies such as ChargePoint (NYSE: CHPT) and Blink (NASDAQ: BLNK) offer EV charging services and hardware but not, typically, installation. There are many companies which offer installation services for the EV charging market. They are typically electrical and general contracting companies as well as some larger project management firms such as Black and Veatch, Bechtel, CH2M Hill and AECOM. Our EV ARC™ units incorporate whatever charger the customer wants, so we are not competing with the charger company, but rather creating opportunities for them which they might not otherwise have had. · EV Sheltron uses 20-foot shipping containers with batteries inside, solar panels on the roof and an EV charger bolted to the outside. They can deploy almost as fast as we can, and operate off grid, but there are several clear disadvantages: o Containers render a parking space unusable. Our products do not reduce available parking space, which is an aspect of our product that is protected by one of our patents. Most jurisdictions have a minimum number of parking spaces required for the use on the property. If you remove even one parking space, then the property can drop out of compliance. Our products do not reduce available parking but shipping containers in a parking space do. o Based on EV Sheltron’s design, we do not believe that it can withstand the same environmental conditions such as wind and seismic that our EV ARC product can. o A 20-foot shipping container does not fit into a standard legal parking space which measures nine feet by 18 feet. Two feet of the container will encroach on the drive aisle which is generally not a good idea and often illegal because drive aisles can also serve as fire lanes. o Shipping containers do not have BeamTrak™, our patented sun tracking product and cannot get the same energy density which means less electricity to deliver to EVs. o Shipping containers can be considered unsightly, and many property owners may not want them in their parking lots. · Paired Power offers a “pop-up” solar canopy, but we do not believe that it fits inside a legal sized parking space without reducing available parking. We also do not believe that it can withstand the same environmental conditions such as wind and seismic that our EV ARC™ product can. It also must be assembled by on-site personnel in contrast to our EV ARC™’s rapid assembly-free unfolding deployment. Many solar installation companies are now fixing EV chargers to their parking lot structures and some are offering packages combining solar rooftop installations and EV charger installations for the residential marketplace. These installations are almost always grid-tied, require construction and electrical work and do not include energy storage. Electrify America is another example of an entity which is providing free or discounted EV charging infrastructure Electrify America plans to spend $2 billion by the end of 2026 on EV charging infrastructure access and education programs in the United States ($800 million in California). Electrify America is a customer of Beam Global and has used our products to assist in the expansion of their EV charging network. 14 We also face competition, to some extent, from entities which are offering free or discounted EV charging infrastructure to our prospective customers. Utilities such as the three large IOUs (investor-owned utilities) in California (SDG&E, PG&E, SCE) have successfully lobbied the California Public Utility Commission for permission to rate base the costs of installations of EV chargers. As a result, they can offer the installation, or “make readies” of electrical circuits and other civil infrastructure, for a lower price or in some instances for free, to certain customers. We are adding utilities to our customer base and have provided product to seven utilities to date. We do not view utilities as competition and instead view them as a significant opportunity as they increasingly add off grid solutions to their energy mix. Our electric bike recharging product faces product competition from a variety of installers of bike sharing stalls and electric bike charging stations. Most electric bike stations that we are aware of are connected to utility grid and as a result rely on construction and electrical projects and the utility grid connection. We believe no other company is producing a robust on the rapidly deployed high school charging station which provides a secure location for the bicycles, the charging infrastructure, and all of the electricity that the bicycles will ever consume. In general, adopters of electric motorcycles after engaged separate contractors and service providers for the provision of the charging which is necessary to keep those motorcycles active. We are not aware of any other company which provides a turnkey solution which includes a bundle with the motorcycles, the charging infrastructure and the fuel for the motorcycles under a single invoice there's no construction electrical work or project management or planning required. Energy Security Where energy security is concerned, we compete with companies that produce generators and combine solar and storage solutions. Companies in this space range from small startup companies like Green Charge Networks to behemoths like General Electric and NEC. Siemens, Eaton, Schneider, Generac, and other large electrical component companies are all also working on combined renewables/storage product solutions. We are in contact with all these companies and have not observed that any of them have a product which provides all the same value and differentiation that our EV ARC™ product delivers because our EV ARC™ systems are transportable, rapidly deployed and offer multiple layers of value beyond EV charging and emergency power. Our competitive advantage over these other solutions includes: o Rapid deploy ability and scalability of our products. Our products offer a turnkey solution, are manufactured in our facilities and can be deployed in less than an hour after delivery to a customer. This compares favorably with grid-tied alternatives which involve an entire ecosystem for the design, engineering, permitting, and constructing of civil projects which require engaging a company, or group of companies, including architects, civil engineers, electrical engineers, zoning specialists, consultants, general contractors, electrical contractors, and EVSE vendors. These grid-tied projects can take six months to two years to complete. o Lower total cost of ownership. Beam’s products are powered by renewable sources. As a result, there is no charge for on-going energy to power vehicles because our products do not generate a utility bill. o Ability to operate during blackouts and brownouts. Our battery storage enables our units to continue to operate when the utility grid is down because we rely on locally generated renewable sources for energy. Most of the EV ARC™ systems we deploy include an emergency power panel that provide emergency power to operate other devices and emergency equipment during outages. Typical grid-tied solutions fail during grid failures and do not provide a source of emergency power. Even those grid-tied solutions that have back up battery integration rely on the grid to charge their batteries. During prolonged grid failures, those systems fail while Beam products will continue to operate. o Because a grid connection is not required, Beam’s EV ARC™ can be located anywhere, including prime locations in the front of buildings or remote locations that are hard to connect to a grid. Most grid-tied chargers are deployed in locations where the utility grid is easy and inexpensive to connect to, which may be locations that are not easily accessible or unsafe for drivers. We believe that as EV charging expands, the cost of grid tied installations will increase dramatically for desirable locations such as in front of stores or where people want to park due to the cost and complexity of bringing the grid to the charger. The cost and complexity to deploy our products will not increase and in fact, we believe that, like any other manufacturing company, our costs will decrease while our efficiency and deployment velocity increases. o We believe that the utility grid lacks sufficient capacity to replace oil as transportation fuel. The grid was not designed and has not been updated to do this. In many markets the grid is already operating at maximum capacity particularly during hot weather when people increase their air conditioning requirements. Our products provide extra capacity to charge EVs without requiring complicated, time consuming, environmentally impactful, and risky expansions of the centralized utility grid infrastructure. 15 o Environmentally sound product using clean energy. Grid-tied chargers rely upon electricity, more than 60% of which is generated by burning fossil fuels. The electricity our products provide is 100% emissions free. Furthermore, the construction activities required to dig trenches, manufacture, and pour concrete and perform the other tasks related to the construction and electrical installation of a grid-tied charger are environmentally impactful and reduce the environmental benefits of EVs. Our products are deployed with minimal or no disruption or environmental impact making them a cleaner choice. o Beam products can be relocated which gives the customer the flexibility to move it if a job site changes or business needs change. Grid-tied installations are a permanent solution. Many of our customers operate in leased facilities. The transportability of our products means that a customer can remove them when a lease matures whereas grid-tied solutions become tenant improvements and a sunk investment. o BeamTrak™, our patented solar tracking solution which causes the solar array to follow the sun generating up to 25 percent more electricity than a fixed array, is a significant advantage for our products over any similar offering. Our unique ability to deliver up to 25% more driving miles to an EV from an off-grid solar installation is, we believe, a significant differentiator. o Over time, we have continued to make improvements to our product, which increases our product’s energy production while reducing product costs, whereas the grid-tied competition is stuck at a theoretical maximum amount of energy that can be delivered at a given location. Streetlights and integrated steel structures The street light industry is highly competitive and there are several companies operating in Europe who directly compete with us. While cost is generally a major factor for our customers, the 30 years that our European facilities have spent successfully delivering product to customers gives us a competitive advantage, particularly with those customers with whom we've already done business. Smaller competitors are generally less well equipped and because they buy less raw materials, particularly steel, they tend to have higher cost structures where direct costs are concerned. We are often able to compete with the larger competitors through our local presence in the Balkans and through our more nimble and entrepreneurial approach to winning contracts. Competitors: 1. Petitejean S.A.S. – France 2. Pali Campion SRL – Italy 3. Valmont Polska Sp. z.o.o.V– Poland 4. Dalekovod D.D. – Croatia 5. Omega D.D. - Croatia We believe that the combination of our legacy streetlight business with our patented portfolio of renewable energy security and EV charging products as well as our ability to create bespoke custom batteries, makes our product offering unique within the markets we are targeting period. We further believe that in certain circumstances the unique nature of our business will create a barrier to entry for our competition even in the legacy Street lighting and other integrated steel structure product businesses. Manufacturing We are headquartered in San Diego, California in a leased building of approximately 53,000 square feet professionally equipped to handle the significant growth possibilities we believe are in front of us. The facility houses our corporate operations, sales, design, engineering and product manufacturing. The San Diego lease expires on August 31, 2025 and we are currently exploring options. We also lease a 37,800 square foot facility in Broadview, Illinois, where we produce our energy storage products for our own products and for a variety of other customers who need energy storage solutions. We intend to produce BeamSpot™ products in this facility as well. In Europe we own a 45,033 square meter office and manufacturing facility in Kraljevo, Serbia on 6 acres of land that has adequate space and capacity to manufacture Amiga’s legacy product offerings as well as EV ARC™s and our other products as needed for the European market. We also lease a 465 square meter small business office in Belgrade, Serbia for Telcom. 16 All of our products are currently designed, developed and manufactured in one or more of these facilities. We have been able to reduce our costs and improve our quality by performing fabrication in-house. This also provides a good environment for improving the manufacturing process, as well as for the development of new products. Many of our suppliers are local, which allows for shorter lead times and lower transportation costs. The EV ARC™ product family including BeamBike™, BeamPatrol™, BeamWell™ and BeamSkoot™ requires no field installation work and is typically delivered to the customer site by us or by a third-party transportation company for a fee. Our BeamSpot™ product requires minor on site work you modify the existing three flights foundation so that it can support the extra load which beam spot with its solar array and wind turbine creates. We sell our Solar Tree® products as an engineered kit of parts to be installed by third parties employed by the buyer of the Solar Tree® kit. We continually endeavor to reduce component costs and make production and design improvements in both our products and our processes to reduce our manufacturing costs, while maintaining the high quality for which we strive. As unit sales continue to increase, we anticipate that we will be able to spread our fixed overhead costs over more units, which, along with our other cost controlling efforts will reduce the cost per unit. Customer Concentration During 2024, 62% of our revenue was attributable to federal, state, and local governments, compared to 80% in 2023. Furthermore, 25% of our revenue was attributable to the state agencies and municipalities in the State of California, compared to 14% in 2023. Backlog Our backlog on December 31, 2024, was $5.6 million. Our backlog on December 31, 2023, was $21.7 million. Reported backlog represents firm purchase orders or contracts received by customers for deliveries scheduled in the future. Government Regulation Businesses in general are subject to extensive regulations at the federal, state, and local level. We are subject to extensive government regulation relating to employment, health, safety, working conditions, labor relations, and the environment during the conduct of our business. In order for our customers to enable the installation of some of our products, they can be required to obtain permits from local and other governmental agencies. In the event that our customers elect to connect our products to the utility grid, they must comply with the applicable rules and regulations of the relevant state public utility agencies. or our customers to take advantage of available tax and other governmental incentives associated with the installation of solar power production facilities, and the production and use or sale of solar power, they must comply with the applicable regulatory terms and conditions. There may also be government regulations that could impact us as we begin to sell into the European market. Changes to new government regulations may have a material adverse impact on our business, operating results, and financial condition. Employees As of December 31, 2024, we have 276 employees, of which 31 are temporary employees. Most of the temporary employees are retained through a temporary employment agency to maximize our flexibility and to reduce the risks and costs associated with permanent employees. We believe our employee relations to be good. None of our employees are represented by a labor union or collective bargaining agreement. 17